Brand boutiques are popping up like mushrooms the last few years. I wonder how the authorized dealers feel about this and what the ideas are behind these brand boutiques. The authorized dealers are more or less required to buy a certain collection of watches from a brand, even if they know upfront they won’t be selling certain models. The boutiques however, can probably decide on their own what to buy, or it just doesn’t matter because they ARE the brand and can return the watches that don’t get sold back to Switzerland (for example).

The authorized dealers have their own solution for this, which is selling or trading the watches that they don’t want to sell or can’t sell, to [grey] dealers elsewhere, who CAN sell these items. For example, gold/steel Rolex Date-Justs are probably more populair in Asia then here in Europe, and the stuff we need here in Europe is mainly stainless steel. Does this explain all the Rolex sports models with country number 888 (Hong Kong/China) that are available through grey dealers in The Netherlands?

Opening of the Omega boutique in Hong Kong

Opening of the Omega boutique in Hong Kong

So, what if you are an authorized dealer of TAG Heuer and 100 meters down the road a TAG Heuer boutique opens its doors? I can imagine how that must feel. Not only in terms of (decreasing) sales, but also in terms of the brand’s loyalty towards the dealer.

TAG Heuer Boutique in Budapest

TAG Heuer Boutique in Budapest

Is this the way for brands to get full control? Opening boutiques everywhere? I don’t want to go to a boutique, I want to go to the dealer I have a good relationship with. So, what options do they have left? Give up their dealership of certain ’boutiqued brands’ and get the watches of that brand via the grey circuit? As a customer, I don’t care much if a dealer is actually authorized dealer or that he gets it through grey import. As long as you have the warrantee, good service and the certainty that it’s all legit and genuine, it is fine by me. The price should be good and you should feel comfortable with the dealer you are buying from. Authorized or not.

Are the brands pushing the current authorized dealers towards becoming unauthorized dealers? Or am I missing something here and do the authorized dealers actually benefit from these brand boutiques? Until I hear differently, I think this is very unfair competition (without being naive of course ;)). What do you think? Please leave your thoughts by clicking on the comments.

  • Boutiques only benefit the brand, not the dealers. For all of the consumers without a relationship with a reputable dealer they are going to appreciate the larger selection you get at a boutique which of course hurts the authorized dealer’s bottom line. Sure, increased brand recognition is good but not if it creates competition for your store.

    On the one hand the brands claim to protect the AD by not allowing sales on the internet but turn around and discount models to grey market dealers and open up large beautiful boutiques in their backyards. I don’t like the idea.

    AD’s keep money local and boutiques return the profits to Switzerland. Which is better for your local economy?

  • Blue Orca

    In Hong Kong, the Rolex boutique stores are owned and run by the Dickson Group, which also operates the Dickson Watch & Jewellery stores. So, for the Rolex brand at least, one AD owns the brand’s local boutique stores, competing with the other ADs.

  • @J.Peter: Thanks for your comments. Boutiques are able to get a more impressive collection of a brand than an authorized dealer. Some dealers have to wait for ages for certain models.. Also, some accessories are only available at boutiques. The Omega SAGA book and its successor (the big black book) is only available at boutiques. Pfff…

    @Blue Orca: Nice nick 🙂 The Dickson Group has made a smart move then!

  • Evert

    Hi RJ, my friend!
    Brand stores communicate the brand, something IWC tries to do in jewelry stores as well with their >>corners<<. In the luxury bizz brand emotion is everything. So it’s a logical step the watch industry takes. Problem is that all brands do the same thing now and what is the added value and what is the unique quality they bring? Some exceptions by Panerai (in Italy), but most brand stores look all the same as their competitors: luxurious and modern, great quality but it could be just another jewelry store as well. In fact that’s not at all strange, since what sets them apart is their watches and the story behind it, and not the boutiques.
    On the other side of the spectrum some brands like Doxa and Stowa are selling their watches online saying No Thanks to expensive retailers and marketing. They use their customers on the forums as their ambassadors. Together with a thriving second hand market on the boards and ebay AND more and more competition from highly repuptable grey market dealers as you mentioned, the old jewelry store will see it’s market share, profits and overall relevance for the watch business decline…. but just a little: The good ones are all but gone and have all chances to reinvent themselves in a thousand ways. Nothing is as exciting as a free market full of competition and innovations.

  • Evert,

    Of course, the free market is exciting, but I don’t believe that there is much freedom for authorized dealer at the moment. 😉

    Doxa and Stowa do a nice job with the online marketing and selling, or Linde Werdelin with their e-boutiques (both direct and via distribution channels).

    All the best,
    p.s. When do we visit Duesseldorf again? It was too long ago!